DATELINE: BRAINTREE, MA…
The staggering rise in foreclosures nationwide has also had an adverse impact on senior homeowners who may have refinanced an existing mortgage, lured by the low “teaser” rates of adjustable rate mortgages. The prospect of lower interest rates and lower monthly payments in many cases has now burgeoned into dramatically higher monthly mortgage payments after the initial 2 or 3-year period of low interest rates has passed.
Can a reverse mortgage help senior homeowners avoid foreclosure?
George Downey, the Founder of Harbor Mortgage Solutions, Inc. in Braintree, MA, offers an outline of some basic criteria of a reverse mortgage that might help a senior homeowner avoid foreclosure. Downey, an expert on reverse mortgages, is also a past Board Chairman of the Massachusetts Mortgage Association.
It’s easier than it might seem for a senior homeowner to fall behind in their mortgage payments. A variety of unforeseen events can wreak havoc on a senior homeowner’s ability to keep up mortgage payments, particularly when they rely on a limited fixed income. Unexpected medical expenses, death, divorce, loss of a job, increased taxes— all of theses factors can upset the fragile budget-balancing act required to make it through the end of the month and pay bills on time.
If a homeowner does fall behind in their existing mortgage payments for any reason, the best course of action is to contact their lender before foreclosure is imminent to see if a repayment schedule can be worked out. If a senior homeowner (or the youngest spouse in the case of couples) is over the age of 62 and has a mortgage that is relatively low in relation to the appraised value of the property (meaning that you have a significant amount of equity to tap into), it may be feasible to investigate the use of a reverse mortgage to avoid foreclosure, particularly if no other resources are available. Unlike a home equity loan, there are no monthly payment obligations with a reverse mortgage.
There have been many cases where a reverse mortgage has literally saved the day, rescuing a senior’s home from foreclosure. Since the terms of a reverse mortgage require that any preexisting mortgages be paid off before the proceeds of the reverse mortgage become available, the lender that is threatening foreclosure is paid first. Any subsequent liens or debts can also be settled from the proceeds of the reverse mortgage, with no stipulations on the use of the remaining cash. Even if there is a minimal amount of cash left after paying off the primary lender, foreclosure is avoided, no monthly payments are required, and as long as the senior borrower continues to live in the property, the loan can never be called.
With no financial or credit qualifications to meet, no monthly payments obligations, and no restrictions on the use of the cash, reverse mortgages are rapidly becoming a new and vital source of cash for today’s seniors. Consultation with family members, a trusted financial advisor or elder law attorney, and a competent reverse mortgage consultant are a must for senior homeowners to educate themselves about the various options available and to determine if a reverse mortgage would be suitable solution for their particular needs and circumstance.
Customized Harbor Mortgage Solutions
Specializing in conventional residential and reverse mortgages, Harbor Mortgage Solutions, Inc. is located at 100 Grandview Road, Suite 105 in Braintree, MA. George A. Downey, who is now joined by his son Christopher Downey, founded family owned and operated Harbor Mortgage Solutions in 1978.
Assisted by a staff of experienced mortgage professionals, Harbor Mortgage Solutions is dedicated to providing customized service, obtaining the best possible solution for each individual client every time. An equal opportunity lender licensed in Massachusetts (license #MC0041) and Rhode Island (license #20041821LB)
For additional information on services offered by Harbor Mortgage Solutions please call 781-843-5553 or 800-599-8700, or visit www.HarborMortgage.com.
